Ad measurement is messed up for a lot of reasons: complex customer journeys, an overreliance on last click, attribution windows that are too long or too short.
But there’s another reason marketers find it difficult to understand their “true ROI,” says Marilois Snowman, CEO and a founding partner of independent media planning and buying agency Mediastruction, on this week’s episode of AdExchanger Talks.
“A lot of agencies conflate ROAS for ROI,” Snowman says.
By hyper-focusing on return on ad spend rather than the overall return on investment, a marketer assumes all of its conversions are the result of paid media, which isn’t the case.
A person might convert because they got retargeted with digital ads 17 times in the space of one week. But there are also lots of exogenous variables that can influence whether someone makes a purchase or engages with a brand in some other way.
There’s the weather, seasonality, time of day, economic conditions, political events, cultural trends, exchange rates, supply-chain issues – and that’s just a short list.
Media mix modeling (MMM) is one way to measure the effect of these factors on a consumer’s behavior.
Although MMM takes some flak for being complex, time-consuming and ineffectively measuring the impact of digital marketing, Snowman is a big fan, because MMM helps marketers capture their true ROI.
Mediastruction developed its own MMM tool called FutureSight, which enables brands to organize their online and offline data from ad buying platforms in one place so they can more easily assess how ad exposure across channels affects sales and other conversion types.
Many brands might be surprised to learn that, in a given period, the majority of their incremental sales are attributable to things other than paid media, Snowman says.
But “a lot of smaller brands miss it,” she says, “because they’re looking at ROAS or they’re looking at some sort of audience identifier as a conversion metric.”
Also in this episode: How AI is transforming media buying, serving midsize brand clients (who Snowman refers to as the “forgotten middle”) and why the online advertising industry needs “chief morality officers.”
For more articles featuring Marilois Snowman, click here.
